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The Covenant Of The United States Essay

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Question Presented Was the covenant not to compete signed by David Prime, enforceable under Arkansas case law as of December 31, 2004 when: (1) it restricted him from working in “the business” of developing, manufacturing and commercializing related products and services like that of GWI; (2) he was restricted to the geographic region of Little Rock Arkansas and (3) when he was given a time restriction of 18-months? Short Answer No. For cases regarding the enforceability of covenants not to compete, the courts look at geographic and time factors to determine reasonableness and enforceability. When one area of the covenant not to compete is found to be unreasonable, the entire covenant not to compete is unenforceable. See Quality for example . In evaluating whether the geographical restrictions in a covenant not to compete are overly broad, Arkansas courts consider the following factors: (1) trade area of the employer; (2) employee’s ability to work elsewhere; (3) if its restriction affects the public interest and (4) the clarity of the restriction. When evaluating whether the time restrictions in a covenant not to compete are reasonable, the Arkansas court considers factors such as: (1) impact on ability to make a living; (2) time anticipated for training of new employees; (3) information becoming antiquated and 4) potential money loss of the company. The most relevant factors to be evaluated are trade area; ability to find work; ability to make a living and time
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